SCN and Cancellation Order Unreasoned: Delhi High Court directs Respondent to Restore Petitioner’s GST Registration [Read Order]

In a recent ruling of Delhi High Court the impugned cancellation order canceling the petitioner’s Goods and Services Tax (GST) registration and Show Cause Notice was quashed and the respondent- department was directed to restore the petitioner’s Goods and Services Tax registration owing to unreasonable cancellation.

The petitioner, Scope Promoters P. Ltd. filed a  petition, inter alia, impugning the cancellation order whereby the petitioner’s Goods and Services Tax (GST) registration was canceled. The petitioner owns a hotel whose management and operations were handed over to another company.

A show cause notice ( SCN ) was issued to the petitioner after an employee at reception desk of petitioner’s hotel failed to provide information to the officials of respondent, who visited the company to enquire about petitioners which proposed to cancel the petitioner’s GST registration.

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The petitioner was called upon to show cause notice ( SCN ) within 7 working days and directed to appear before the proper officer. Additionally the petitioner’s GST registration was suspended from the date of the SCN.

Petitioner replying to the SCN said that his office was located at the 4 th floor in the same building, the management team being inexperienced failed to provide proper information to the concerned officers. The proper officer passed the impugned cancellation order, canceling the petitioner’s GST registration.

The petition filed an application for revocation of cancellation of order, and provided evidence to establish that its principal place of business was located at the fourth floor of the hotel building.

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The Appellate Authority rejected the petitioner’s appeal on the ground that the documents were not attested and the petitioner had failed to submit the ownership document of the building in question, and also on the ground that it had not obtained the No Objection Certificate from the Anti Evasion Branch. And also observed that the petitioner’s contentions that the SCN and the impugned cancellation order are unreasoned.

The SCN records no reason for proposing to cancel the petitioner's GST registration, it only states that proceedings for cancellation of the GST registration have been initiated. The impugned cancellation order is also unreasoned. Therefore the SCN as well as the impugned cancellation order are liable to be set aside.

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The respondent Commissioner For Central Goods and Services Tax, Delhi counsel represented by Advocates Arnav Kumar and Shreeya Singh, submitted that by way of inspections conducted it was found that petitioner was found existing at the given address. The department instructed that the impugned order canceling the petitioner’s GST registration may be revoked.

The division bench of Justice Vibhu Bakhru and Sachin Datta observed that the impugned cancellation order canceling petitioners' GST registration should be revoked and directed the petitioner’s GST registration.

To Read the full text of the Order CLICK HERE

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